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2014年7月31日 (木)

軽減税率 家計と活字文化を支えたい

The Yomiuri Shimbun
Consumption tax hike should not hurt household budgets, reading culture
軽減税率 家計と活字文化を支えたい

A planned increase in the consumption tax rate must not weigh too heavily on ordinary household budgets, which would lead to an economic slowdown.

We believe if the tax rate is raised to 10 percent in October 2015, as initially planned, a lower rate should be applied to daily necessities, such as food products and newspapers.

A council, comprising members of the Liberal Democratic Party and its junior coalition partner, New Komeito, is hearing the opinions of close to 50 organizations, including various industrial associations, regarding the pros and cons of adopting a lower rate.

The Japan Newspapers Publishers and Editors Association told the council that a consumption tax rate increase to 10 percent should be accompanied by a measure to lower the rate to 5 percent for newspapers, books and other essential commodities.

In its reasoning, the association told the LDP-Komeito panel, “Newspapers are not mere consumer items but public goods that can form the basis of people’s knowledge.” The association emphasized the need to “protect an environment in which low-income earners, residents of provincial areas and any other person can enjoy equality in affording to purchase [newspapers].”

Newspapers are tasked with reporting on a wide range of news while also conveying a diversity of opinions to the public. Therefore, newspapers can be described as an essential tool for nurturing a cultural climate for reading printed matter and preserving a cornerstone of a democratic society.

During the hearings, consumers and some organizations said they supported a proposal to adopt a consumption tax rate lower than 10 percent for daily necessities.

The National Liaison Committee of Consumers’ Organizations urged the ruling parties to implement measures aimed at easing the financial burdens to be shouldered by consumers when the tax rate is increased, including a lower rate for food products. “Though the economy is said to be recovering, consumers are finding it difficult to truly feel” a return to prosperity, the committee told the council.

This opinion was echoed by the Central Union of Agricultural Cooperatives, which told the panel it would be desirable to introduce a lower rate for farm products and processed goods.

Objections to lower rate

Meanwhile, the Japan Business Federation and many distributor associations raised objections to the adoption of a lower tax rate, citing an anticipated increase in business procedures that will accrue from the introduction of a mitigated tax rate.

These organizations defended their stance in saying it would be difficult to form a consensus regarding what kind of item should be covered in a lower tax rate. They said the problem would be further complicated in keeping accounts and paying taxes if there is more than one consumption tax rate.

There is no doubt that the introduction of more than one tax rate will entail an increase in pertinent business procedures. In most European nations, however, lower rates have long been applied to food, newspapers and other daily necessities under their value-added tax systems, equivalent to our nation’s consumption tax.

We hope the government and private-sector organizations will study precedents overseas and then join hands to work out efficient procedures for consumption tax-related payments.

To ensure that the tax rate hike from 5 percent to 8 percent in April worked smoothly, the government decided to pay low-income earners benefits. However, there will be a limit to what one-time benefits can achieve in underpinning consumer spending.

We believe the introduction of a lower rate for daily necessities will lessen the impact of the tax hike on consumers, while also reducing the risk of a slump in consumption. Whenever consumers buy daily necessities, they may actually feel they are benefiting from such a tax plan.

The Finance Ministry has released an estimate regarding a loss of revenue to be accrued from a lower tax rate set on a certain category of commodities. If a reduction of one percentage point is applied to “all beverages and food products” at the time of the tax rate hike to 10 percent next year, it will likely result in a loss of ¥660 billion annually, according to the ministry.

Caution should be exercised in determining what kinds of items should be eligible for a lower tax rate, with due consideration given to a balance between the need to secure revenues for the social security system and to ease the burden on household finances.

(From The Yomiuri Shimbun, July 30, 2014)


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